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Ninety per cent of the container ships heading to Northern Europe from Asia have been forced to slow to the speed of a "fresh breeze" because of a sudden slump in demand.
Analysts said the ships had been ordered on to "extra-slow steaming" as a way of saving money and stretching out the work they have, reported The Times.
The average speed of container ships has been cut from 25 to 17 knots, which, according to the Beaufort scale, equates to a fresh breeze.
Demand for imported goods from Asia has fallen, leaving shipping firms with significant excess capacity. The purchasers of the cargo are usually happy with this arrangement as it postpones the arrival of goods they are struggling to sell.
The situation in the shipping market has deteriorated so sharply that companies are expected to start idling vessels within weeks. Emmanuel Bousquet, a sector strategist at Olivetree Securities, said: "Shipping companies took a lot of capacity out in 2009, so when demand, particularly from retailers restocking, increased this year they initially struggled to meet it. A lot of extra capacity has now been added but demand has slowed again and the fourth quarter of this year and the first quarter of next are looking tricky for shippers."
Cargonews Asia
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